In a recent blog post, Isis Krause explained how research on giving circles helped to inspire the launch of Philanthropy Together, a “new nonprofit, co-created by hundreds of giving circle and collective giving network leaders, to help start new giving circles and help existing giving circles thrive.” Its ambitious mission is “to diversify and democratize philanthropy by connecting and catalyzing the field of giving circles.” Their mission is timely and urgent.

In this follow-up blog, I want to do two things. First, I want to place the current challenges to philanthropy in historical perspective, drawing on the parallels between our current historic moment and the Gilded Age.

Second, I will argue that the key characteristics and strengths of giving circles offer valuable insights about how to democratize philanthropy. Not only do giving circles themselves engage “new donors” who are more racially and socio-economically diverse, but their success in doing so offers compelling lessons to other institutional donors, fundraisers, and nonprofits.

Just as the invention of the community foundation represented a step forward in democratizing philanthropy in 1914, in 2021 giving circles offer an organizational innovation to take another step in that direction. In this moment of crisis, giving circles offer a way forward toward more inclusionary and democratic philanthropic practice.

While foundations and DAFs together overshadow the size of resources being mobilized by giving circles, giving circles can make key contributions that include, but go beyond, the social capital generated among their participants: demonstrating how grantmaking can engage BIPOC communities, helping to redefine — and perhaps erase — the distinction between donors and recipients; providing support to social change organizations that would not receive support from foundations, much less government; and, mobilizing and engaging donors beyond making a monetary contribution, to becoming volunteers and cultivating their power as community leaders.

Private donors — including individuals, foundations, and corporations — play a unique role in the philanthropic ecosystem. As contrasted with income generated from fee-for-service work, contracts, and government funding, private donations have the potential of allowing for greater innovation and experimentation, including support for public policy advocacy (Fleishman, 2007; Payton & Moody, 2008).

Read the full article about giving sources by Michael Layton at Johnson Center.